Only 53% of salespeople are making or exceeding their quota right now (Korn Ferry). I don’t know what your company’s attainment goals are, but I bet they’re more than 53%.
Now there are a ton of reasons why quota attainment might be low. For the purposes of this post, I want to talk about sales development (SDR) teams and how to improve their contribution to attainment. Because 71% of sales development teams deliver less than half their company’s sales pipeline.
And if you can patch up even one bottleneck in your revenue system, you stand to gain a lot in increased revenue. Imagine if you could take your SDR team from contributing 40% of pipeline to 50 or 60%. How would that impact conversion rates further down the funnel? The more qualified meetings and opportunities your SDRs are generating for AEs, the better your overall attainment will be.
So how can you improve your SDR team’s effectiveness?
Basic challenges for hitting quota
There are a few simple challenges that impact every SDR at some point, especially newer team.
- Outreach - Are they sending the right messages? Using the right channels? Doing enough outreach?
- Prospects - Are they reaching out to the right accounts? To the right people at those accounts? Are they contacting enough accounts?
Think about the quantity and quality of both outreach and prospects. These are generally issues that can be addressed through training and enablement.
Gartner estimates that it can take 18 or more dials to connect with a prospect over the phone! How many touches are your SDRs getting in before they give up? And for inbound leads, companies are 21x more likely to convert a lead into an opportunity if they follow up in 5 five minutes as opposed to an hour (New Breed Revenue). The quantitative aspects of outreach matter.
And beyond the simple reasons a rep might not be hitting their quota, there are larger systemic issues that could be at play. Among them are training, coaching, leadership, and incentives, all of which are a topic for another post. Here, we want to discuss sales process.
Gartner wrote about 8 reasons sales development teams fail. Two of their reasons are no agreed-upon qualified lead definition and not focusing on generating qualified leads. Let’s talk more about those ideas.
First, I want to clarify a quick thing about my use of the word “lead” here. I mean leads in the most general sense. Not capital-L Lead like the Salesforce object, or lead like a specific email address. I mean lead as in a potential prospect. If your company uses an ABM model, your leads are actually accounts. But let’s not get caught up in technical semantics here.
What criteria do you consider when qualifying a lead? Your qualification criteria may include firmographics of the account, persona characteristics like job title and level, previous engagement with your outreach, exposure to your competitors, and more.
You need to be sure sales and marketing agree on the criteria you’re using to qualify leads. We’ve all seen (and probably worked on) teams where sales thinks one kind of lead is qualified, and marketing thinks another is. When those definitions don’t line up, you’re going to run into trouble. So come up with a definition that works for everyone. Start simple - you can always narrow it down later.
To further complicate the matter of lead qualification, most organizations have more than one kind of qualified lead - you may have SQLs, MQLs, PQLs, even EQLs. You’ll likely have different qualification criteria and follow-up processes for each. And sometimes the definition between different leads is unclear. For example, if an SDR reaches out to Person A in a new account, and Person B, who also works at that account, downloads a piece of marketing content, is this an inbound lead or an outbound lead?
After you’ve determined the qualification criteria, you need to ensure that your team is focused on the right kinds of leads. 60% of sales teams don’t effectively prioritize accounts during prospecting (Korn Ferry). Let’s talk about some of the reasons why this might be.
Generating qualified leads
In some organizations, the sales development team turns into “the dumping ground for other tasks, such as sales support, inviting people to events and doing surveys” (Gartner). In fact, Demandbase found that 39% of sales development leaders say non-sales activities prevent SDRs from meeting their goals.
Put real effort into determining the right quota for your SDRs and do everything you can to set them up to focus exclusively on hitting that quota.
What should that quota be?
- Number of leads qualified (SQLs)
- Number of meetings set
- Number of opportunities created by AEs (SAOs).
What you choose depends on how your sales team is structured, but focus on things the SDR can control. It doesn’t make a lot of sense to comp a SDR based on closed deals, because they can’t control what happens after the AE handoff (you could consider a bonus in this situation if you wanted, however). And these are typically monthly quotas, but some companies pick different timelines for compensation.
Some companies have the SDR team report into marketing, and others into sales. There is no one right answer, but the activities the SDR team ends up working on corresponds to the team they’re on. Just remember, SDRs are not sales assistants.
Determining SDR SLAs
To be sure your SDRs are focused on the right leads, you need to think carefully about the processes you’ve set up around them. That includes rules of engagement and SLAs and guidelines for how to engage prospects. That includes the answers to questions like:
- Will SDRs be responsible for inbound or outbound? How much of each?
- How will target accounts be distributed? Round robin? Geographic territories?
- How will inbound leads be distributed?
- What’s your agreed-upon SLA for leads?
- How will meetings be distributed? Pools vs pods?
- Who does discovery? How do you record and share discovery information?
- When do you convert a lead to an opportunity?
- What happens with new leads for existing accounts?
- How do you hand off a prospect from an SDR to AE?
- Who creates and updates outreach sequences?
The answers to these questions will vary depending on the makeup of your sales organization. But it’s important that you answer them clearly, and everyone across sales and marketing agrees with the answers.
A lot of these process challenges can be eliminated with intelligent automation. That includes the ability to:
- Speed up response time with automated lead and opp distribution that takes time zones, capacity, and availability into consideration.
- Ensure the prospect shows up for the demo with instant meeting booking
- Make follow up dead simple with automated Slack alerts, addition to Outreach and Salesloft cadences, reminders in Salesforce, and more
- Avoid RoE conflicts with lead to account matching
Gradient Works is that system. Interested in talking more about how our automation can improve your SDR attainment? Let’s start with a demo.